My latest Business Standard column:

In this series, we are discussing “cold technologies” which Pip Coburn has defined as those that have neutral revenue or even anti revenue attributes. Cold technologies are important in our context because even as they shrink the investment the users have to make, they help them catch-up or even leapfrog to a world that is “faster, better, cheaper” in terms of the digital infrastructure that we need to build out in India. In the previous two columns, we covered five such cold technologies: open-source software, software delivered as a service, voice-over-IP, Wi-Fi and network computers.

China Supply Chain

A recent cover story in the Business Week talked about “The China Price.” The article began: “They are the three scariest words in U.S. industry. Cut your price at least 30% or lose your customers. Nearly every manufacturer is vulnerable -- from furniture to networking gear. The result: A massive shift in economic power is under way.” It added: “Makers of apparel, footwear, electric appliances, and plastics products, which have been shutting U.S. factories for decades, know well the futility of trying to match the China price. It has been a big factor in the loss of 2.7 million manufacturing jobs since 2000.”

China’s presence looks like a colossus across the world of manufacturing. Using its low-cost labour and a large domestic market, Chinese manufacturers are achieving huge economies of scale, allowing retailers like Wal-Mart to sell microwave ovens at $28. The world textiles industry waits with bated breath to see what will happen in 2005 as global trade barriers come down. China’s presence across global value chains has helped keep prices low. Now, increasingly, Chinese companies are seeking to compete more broadly. Recently, China’s largest computer company was in talks with IBM to buy out its PC business. Going ahead, China seeks to compete with low wages and in high-tech.

India Services

What China has done in manufacturing, India is doing in services. India’s emergence in the software and business process outsourcing services value chain is helping companies cut their costs. A skilled and abundant workforce has been complemented by cheaper telecom costs to enable organisations create software engineering and helpdesk extensions in India. Costs are cut anywhere from 30-70% when companies outsource. Companies using India as a services base is now widespread. The quantum of work being outsourced to India is still small, leaving plenty of room for growth.

In a recent survey on outsourcing, The Economist wrote: “Over the next ten years, Russia, China and particularly India will emerge as important hubs for producing services such as software engineering, insurance underwriting and market research. These services will be consumed at the other end of a fibre-optic cable in America, Japan and Europe. Just as Dell and Wal-Mart are obtaining manufactured goods from low-cost countries, companies such as Wipro, TCS and Infosys, for instance, are already providing IT services from low-cost India.”

File Sharing Networks

Peer-to-peer file sharing networks promise to revolutionse content distribution. Even though Napster was forced to shut down, other P2P networks thrive. More than half the traffic on the Internet is now generated by P2P applications. What they are doing is offering distributed alternatives to the problem of disseminating not just software updates but also broadband content. This promises to spur even more rapidly the growth of multimedia content. As the Web grows beyond text and images to include audio and video, P2P networks can provide affordable alternatives to content distribution.

The Economist wrote recently about the most popular of these applications: “The most active P2P system, accounting for an estimated 35% of all internet traffic according to CacheLogic, is called BitTorrent. It is an open-source software project that is free to use and enables very large files to be stored and retrieved efficiently at essentially no cost. Though it is used for pirated music, it comes into its own when distributing really large files such as movies, games and large pieces of software such as the Linux operating system—things that would otherwise be very costly for companies or individuals to make available for download… With systems such as BitTorrent, the more a file is in demand, the more available it becomes. Content automatically ends up being stored close to the users who request it, improving the performance of the system.”

Advertising

The Internet is also impacting the world of advertising. As search engines have become popular (once again), they have also pioneered a new model to increase the effectiveness of online advertising. The ability to measure responses and pay based on performance is providing unprecedented capabilities to advertisers in fine-tuning their message. Business Week wrote in a special report on the surge in online advertising in the US: “The Net is winning over mainstream advertisers with its computational precision. It delivers hard, quantifiable results measured in clicks and sales -- down to the penny. In the process, it's turning advertising from an art into a science.”

Going ahead, as the time spent online by users increases, online advertising will provide increasing competition to the traditional broadcast media. Dan Gillmor wrote in the San Jose Mercury News: “Consider the new breed of advertiser in the online world. Google's text ads, which pop up after someone searches using keywords, cost in most cases a small fraction of what it would cost to advertise in a local newspaper or broadcast outlet. In other words, Google and the other companies in this space are attracting ads from businesses -- including businesses that are as small as one person in a home office -- that in many cases never advertised before. The potential for this is larger than most people have recognized. In theory, the Net-based advertising market is almost unlimited -- extending to any one person with any one thing to sell.”

So, get ready for the world of tomorrow – increasingly built around cold technologies. They will disrupt incumbents and offer opportunities to upstarts. This is the process of creative destruction that guarantees that the only constant in the world is change.

Bob Cringely has an interesting idea: "With almost $6 billion in cash, Steve Jobs hinted to a group of employees not long ago that he might want to buy something big, though I am at a loss right now for what that might be. Or Apple might decide to throw some of that cash into the box along with new computers by deliberately losing some money on each unit in order to buy market share...We might see that as early as next week with the rumored introduction of an el-cheapo Mac without a display. The price for that box is supposed to be $499, which would give customers a box with processor, disk, memory, and OS into which you plug your current display, keyboard, and mouse. Given that this sounds a lot like AMD's new Personal Internet Communicator, which will sell for $185, there is probably plenty of profit left for Apple in a $499 price. But what if they priced it at $399 or even $349? Now make it $249, where I calculate they'd be losing $100 per unit. At $100 per unit, how many little Macs could they sell if Jobs is willing to spend $1 billion? TEN MILLION and Apple suddenly becomes the world's number one PC company. Think of it as a non-mobile iPod with computing capability. Think of the music sales it could spawn. Think of the iPod sales it would hurt (zero, because of the lack of mobility). Think of the more expensive Mac sales it would hurt (zero, because a Mac loyalist would only be interested in using this box as an EXTRA computer they would otherwise not have bought). Think of the extra application sales it would generate and especially the OS upgrade sales, which alone could pay back that $100. Think of the impact it would have on Windows sales (minus 10 million units). And if it doesn't work, Steve will still have $5 billion in cash with no measurable negative impact on the company. I think he'll do it."

43 Folders writes: "Over the year or so that I’ve been working with GTD, I’ve returned to David’s book on countless occasions for refreshment, clarifications, and, more often than not, encouragement and inspiration. It’s a well-written book that’s full of practical advice—even for the most seasoned GTD nerd. But, as GTD has gained popularity outside the suit-and-tie business world, it's becoming clear that the stock system has its limitations, and that, frankly, the book is starting to show its age. I think it's time for an update, some new material, and a few second-generation products."

Joel Spolsky offers the following suggestions:

1. Learn how to write before graduating.
2. Learn C before graduating.
3. Learn microeconomics before graduating.
4. Don't blow off non-CS classes just because they're boring.
5. Take programming-intensive courses.
6. Stop worrying about all the jobs going to India.
7. No matter what you do, get a good summer internship.

The Seattle Times writesd about "life interurpted."

E-mail, as it turns out, was just one drop in a dam-breaking flood of technology that has inundated our lives. Today, the constant pinging of your e-mail can be like the drip-drip-drip of water torture. We're swimming in doodads and options — text messaging and search engines, Blackberries and blogs, Wi-fi, cell phones that try to do all of the above, and the promise that we haven't seen anything yet.

We're shooting through technological rapids that have opened doors and changed the dynamic of work, how we communicate and live, and sometimes even think. All these tools have made our lives easier in many ways. But they're also stirring deep unease. Some are concerned that the need for speed is shrinking our attention spans, prompting our search for answers to take the mile-wide-but-inch-deep route and settling us into a rhythm of constant interruption in which deadlines are relentless and tasks are never quite finished.

Scientists call this phenomenon "cognitive overload," and say it encompasses the modern-day angst of stress, multitasking, distraction and data flurries.

In fact, multitasking — a computing term that involves doing, or trying to do, more than one thing at once — has cemented itself into our daily lives and is intensely studied. Research has shown it to be consistently counterproductive, often foolish, unhealthy in the long run, and in the case of gabbing on the cell phone while driving, relatively dangerous. Yet it is also expected, encouraged and basically essential.

3. Adam Bosworth’s ICSOC 2004 talk (November)

Adam Bosworth’s belief that KISS – keep it simple and sloppy – almost always wins is borne out through a lot of examples. This talk lays out the guiding principles for thinking about software and systems.

It is an ironic truth that those who seek to create systems which most assume the perfectibility of humans end up building the systems which are most soul destroying and most rigid, systems that rot from within until like great creaking rotten oak trees they collapse on top of themselves leaving a sour smell and decay. We saw it happen in 1989 with the astonishing fall of the USSR. Conversely, those systems which best take into account the complex, frail, brilliance of human nature and build in flexibility, checks and balances, and tolerance tend to survive beyond all hopes.

So it goes with software. That software which is flexible, simple, sloppy, tolerant, and altogether forgiving of human foibles and weaknesses turns out to be actually the most steel cored, able to survive and grow while that software which is demanding, abstract, rich but systematized, turns out to collapse in on itself in a slow and grim implosion.

4. Om Malik on the need for a People’s PC (May)

This post by Om Malik highlighted the potential of the emerging markets and their need for different solutions. My belief is that the next 90% of the world needs solutions that are both affordable and manageable, and this is the real opportunity for technology companies. Om captures the essence of “massputers” well.

With the dot-com bubble a distant memory, recession-ravaged Silicon Valley insiders are wondering aloud about the next big thing. They haplessly sift the sands of social networks and they chase the chimera of wireless networks, but they ignore technology’s biggest opportunity that is staring them in the face.
It is what I call a Massputer a computer that costs $300 for the computing hungry masses in emerging economies like India, China and Brazil. Users of this massputer should be able to do basic tasks like writing documents, Internet surfing, email and perhaps some business-related tasks like data entry.

There are nearly four billion people who live in these emerging markets and assuming that only 10 per cent of them can afford $300 it is still a market of 400 million. Currently, the PC troika of Intel, Microsoft and Dell typically charge $750 for every computer, which most people in these emerging markets find unaffordable. Even the so-called network computers cost an unaffordable $500-plus.

Tomorrow: Software Shifts